Peru pulls out of APEC summit over Chile spy case

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By Patrick Markey

SINGAPORE (Reuters) - Peru will quit an APEC summit in Singapore after recalling its envoy to Chile over charges a Peruvian military officer had spied for the Chilean government, Peru's foreign minister said on Saturday.

The spying charges emerged amid high tension between the South American neighbours over a maritime border dispute and ahead of a scheduled meeting including President Alan Garcia and his Chilean counterpart Michelle Bachelet at the summit.

"This incident ... means we will be returning early to Lima," Peruvian Foreign Minister Jose Garcia Belaunde told Reuters in Singapore. "We very much want this to be cleared up and investigated."

Belaunde said Peru's ambassador to Chile had been recalled to Lima for talks after Peruvian authorities said they had arrested an air force officer and were investigating charges he was paid to spy for the neighbouring government.

Chile on Saturday denied any involvement in spying.

"Chile does not engage in espionage," Foreign Minister Mariano Fernandez told reporters in Singapore. "We dismiss any charges the Chilean government is involved in anything illegal in regards to relations between the two countries."

Chile and Peru, top South American metal exporters, were participating in the Asia Pacific Economic Cooperation summit in Singapore, where they held talks with Asian countries on free trade agreements.

Earlier Peru's defence minister said the air force official had been detained about 15 days ago and prosecutors were preparing to charge him with treason.

Despite close trade ties, Peru and Chile have a long-standing border dispute.

Peru last year presented a demand in The Hague over its claims to more territory along the mutual maritime border. Chile says the frontier issues were settled after a 19th-century war between the two countries.

(Additional reporting by Antonio de la Jara; Editing by John Chalmers)

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